Excerpt

Have you tried listening more intently to solve your problems? Charles Sy Does this in order to keep things as smooth as possible. Learn more here!

What is the culture in Strat Quad and Dropify?

Charles’ workplace has an average age of 23 to 24. His team is composed of predominantly women, but there are a handful of men as well.

He sees potential in his team. Since the team is still pretty small, Charles can talk to them whenever he’s in the office. He always asks them two questions: “Is the company’s vision clear?” and “Do you see that the company is growing?”. He sets his expectations clearly almost every day that he can.

He also emphasized his core values in Filipino: Masinop, Masipag, may Malasakit and Mahilig Matuto.

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Charles repeatedly talks with them about the vision and the core values. He also strives to have a personal discussion with one of his team members every day. He wants to develop a good relationship between him and his small team.

For now, Charles dons the role of both a manager and a leader which are both essential in a business.

What do you do to improve your leadership skills?

One of the factors that Charles uses to see if things will go smoothly is to simply listen. He is not knowledgeable with tech, but he still knows when something that his team proposes is plausible or not.

A good example of this was Charles’ decision to have the Dropify software be created abroad instead of locally. They produced an advanced and easy to use software that is a few steps above what the local software engineering scene can make.

The decisions that you make as a leader are always in line with the visions. With you helming the process, there will always be a possibility that you will produce good quality output.

Charles doesn’t read a lot of books. But he believes that if people are smart enough, then they should be able to read between the lines. One of the lessons that Charles learned from his time with Axia that he still applies today, is that everything only needs common sense.

Things can get complex, but if you sit down and process things, you’ll realize that they’re very simple. He learned this principle from Elon Musk. His failure was that by automating his whole processing line, it got slower. The solution that he thought of was to once again introduce people into the process.

Most things are just a process. Not everything can be done by technology or people alone. There should be a mixture of both.

Excerpt

Have you ever created something out of necessity? Charles Sy Created Dropify to solve one of his problems. Learn more about it here!

What are some of the biggest mistakes that you have done that you’ve learned from?

One of the most crucial things that Charles made a mistake with is forecasting wrongly. But it can also lead to new opportunities.

In Charles’ case, he wanted to look for ways to make his first business, Strat Quad profit faster because his forecasts weren’t being met. This problem then birthed his other business, Dropify.

There are many problems along the way. Charles understood this and tried his best to keep his actions as conservative as possible. He doesn’t advertise his business because, in reality, most of his processes are still being tested, particularly with Dropify.

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He also learned that not all drop shippers are good. Sometimes they find ways to exploit their services if they’re not monitored correctly.

Right now, Charles is trying to gather data on how his businesses can do better when it comes to long-term growth.

Do you think your companies can scale now?

Charles believes that his businesses can grow a lot. They’re just careful with how they want that scaling to happen.

The goal of Dropify for 2020 is to have 2020 dropshippers by the end of the year. That’s 2020 seller centers and suppliers that they have to monitor hourly. By that time, they need to be able to identify when someone is trying to manipulate the prices.

Do you make suppliers sign up for Dropify?

Charles encourages those who are having a difficult time with their online business, and the people who own a brick and mortar store and want to drop ship to sign up with them.

Suppliers would have a set price for their products. They should put the price that they’re happy with selling their merchandise. The only other expense that they will have is rent and administrative fees from Strat Quad.

Where did you get the software used in Dropify?

Charles had the software made by a third-party overseas. He attempted to do so in-house, but as soon as he realized that it wasn’t so simple, he chose to find the most competent company they know to do it.

How do you hire?

Charles’ HR departments handle most of the hiring process. They find people through LinkedIn, Facebook, and Job Street. Once they find applicants, they put them through a series of interviews and after the interview, Charles then tries to judge the applicants on whether or not they can fit in the company culture.

He described their hiring process as very traditional and basic. He also admits that his interview process may be lacking a few steps.

I personally have done some of Charles’ steps before. What I realized was that my judgment was very lopsided and biased as the founder, especially if the team says that they need more people. I found that the weakness of most founders is that we trust people too much. Sometimes, even if we just first met, I would hire that applicant immediately.

The biggest mistake in hiring is that people don’t take enough time in the hiring process. Why that is will be discussed in another podcast.

Excerpt

How Can Dropshipping Help You Start An Online Business Without An Initial Investment?

Have you ever heard of dropshipping? Learn more about this pioneer drop shipping company called Dropify in this podcast!

What is Dropshipping?

Dropshipping is the concept of being a reseller without investing capital. In Dropshipping, the merchandise will not go through you.

Strat Quad has been operational for 5 months. How long has Dropify been operational?

Dropify started on January 6, 2020. But in the short time that Dropify has been out, they have already garnered around a hundred clients.

Why do these people want to do dropshipping? What’s in it for them?

Before delving deeper into drop shipping, Charles gave us a bit of context about how it is successful in other countries.

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In America, the majority of the population uses their credit cards when paying for online transactions. They pay immediately after their purchase. That’s considered drop-shipping because the customer was the one that paid for the product before the back-end people fulfill the order.

In the Philippines, most, if not all customers prefer cash on delivery. No one wants to shell out money before the product reaches them.

To be considered a drop shipper, you must not pay for anything during the process. In this case, the risk falls on the supplier. When the merchandise arrives, that’s the only time that the customer will pay Dropify which in turn serves as the middleman that pays both the supplier and the seller.

How does Dropify handle Payments?

There are two types of suppliers. Commodity or general items, and Brands.

Charles mentioned that brands have their own rules. They don’t like it when their pricing is changed and when their marketing standards aren’t met.

Dropshippers working with brands are more like agents. You get a commission of around 10% for the sales that you do.

Why would people choose to dropship with brands?

There’s a marketing principle called Flexicombo. This is when a seller markets bundles of different items with branded merchandise, increasing the overall value of that bundle. Some people like working with brands because they can increase the value of the other things that they sell.

Those who sell generic items can also receive incredible profit just by being smart and effective with how they market their products.

Essentially, drop shippers are salespeople and marketers. These kinds of people that don’t have the capital and don’t like the thought of bubble wraps and the waybills, can choose to be drop shippers and make it work.

How are the hundred drop shippers of Dropify?

The majority of Dropify’s Drop shippers are active. But their talents are extremely evident. Some of them are soaring high, some of them are slowly growing, and some of them are struggling with it. For Charles, dropshipping is really just another talent-based business.

What are the platforms that you use?

Charles emphasizes Lazada and Shopee, while Shopify and Woocommerce might still need a few negotiations, particularly with couriers. The processes are completely different. The money is with the couriers when it comes to cash on delivery. Working with couriers is a completely different ball game.

Excerpt

Would you start a business with just one phone call? Charles Sy started StratQuad in a whim. Learn all about his decision in this podcast!

How did being a traditional online seller take you to the journey of starting up StratQuad?

Charles sold items online under the name of Cotton Depot. His primary products were bedsheets under the brand of sleep essentials. While continuing his online business, his sibling called him and offered him a business opportunity. His sibling proposed starting up a fulfillment center because it was growing really well in the U.S.

After fleshing out the idea more, they talked percentages and also agreed on the amount they wanted to invest in it.

Did you do intensive research before putting up this business?

Charles and his sibling have seen the business grow in other countries. Ecommerce is quickly growing and there is a market for the service that they want to put up. The only thing that they didn’t know was whether or not the market would use their services.

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Charles never did a feasibility study. He just trusted his gut feeling that it will work. And that eventually led to StratQuad. It started in August 2018. During the time, they were only fixing things up. They had their first customers in October 2018.

What is Strat Quad? What do you do?

Strat Quad is a fulfillment center that caters to all e-commerce platforms. They are integrated with Lazada, Shopee, Zilingo, Zalora, Shopify, and Woocomerce. They are the ones that process the orders of online sellers. They started as a back-end solution for e-commerce websites. Now, they also provide importation services they can also provide free delivery services for shipments above 3CbM.

They’re clients also have the option to not have their items delivered to their doorsteps and instead let the Strat Quad team distribute the merchandise for them.

The eliminate the difficult part of being an online store which is to deliver the items

How do people find out about this service?

Right now, Charles relies on word of mouth. Currently, they are already partnered with the big platforms and they’re supportive of the relationship. Strat Quad aims to make starting an online store as simple as it can be for those who make use of their services.

What is your pricing model for Strat Quad?

Strat Quad starts at PHP8,500.00 per CbM. Within the website, there’s a simple form that you need to fill out to import certain things that you’ve already delivered to their warehouse. If the shipment is below 3CbM, then it can be delivered via Lalamove to your address

Why would people want their merchandise to be delivered to them when it’s easy to have you store and fulfill their orders?

This is something that Charles also doesn’t understand. Some people don’t want to surrender their headaches to someone else. He thinks it’s because these people still want to save some money, but it’s a real mystery.

Some clients only want fulfillment, and some of them want to handle their importation. Each has their own preference.

That being said, Charles still opens their services to anyone who wants it. The important part is that their clients can focus solely on selling.

Do your clients still need to contact you whenever there’s a sale?

Lazada and Shopee have seller centers. Sellers can choose to put the StratQuad email under Orders and Fulfillment and Charles will gain access to all the information needed to receive, deliver and fulfill those orders.

How much do they pay? Why don’t some people do this?

Charles charges PHP750 per month for 1.5CbM. For comparison, 3CbM is around the same space as an L300. That’s a lot of space for just PHP1500 a month. With regard to value per money, it’s incredibly worth it.

Excerpt

Would you sell your business to pursue e-commerce? This is exactly what Charles Sy did. Learn more about it in this podcast!

When did you make your first million?

Charles got his first million when he was working on his first branch of Cotton Depot. During that time, profit was really good, and he was incredibly happy the moment when he found out he got his first million.

During this journey to a million, what were some of the principles that helped you make that first million?

A good name matters a lot in the field of fabrics. That’s important because the business model in the fabrics industry focuses on loaning.

Charles was fortunate enough that his parents had already built up a good name and that was brought down to him and his siblings. This helped them negotiate better terms with fabric manufacturers that led to better profits for him.

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What Charles focused on was to protect and maintain his name. He had to always practice a certain level of integrity to keep his name clean and attractive to his business partners.

Do you have a separate bank account dedicated to all of your liabilities?

At the start of his business, Charles had his own and his business’ money mixed in one account. He segregated by putting percentages on his money. He relied on his gut feel.

However, when the business gets larger, you need to separate your personal money with your business’ money. There should be a strict line between these two.

Now that you handle Strat Quad and Dropify, do you still sell fabrics?

Charles no longer sells fabrics because he already sold Cotton Depot. His passion shifted from putting up fabric stores all over the Philippines to e-commerce mainly because his heart went where the money was.

e-commerce is a booming industry. Charles decided to fully focus on e-commerce once it grew exponentially bigger than his fabric business. Slowly, e-commerce became his primary livelihood while the fabrics business turned into a hobby.

During this transition, were there times when you neglected Cotton Depot?

Charles was not afraid to admit that he was guilty of neglecting the Cotton Depot at that time. It reached the point where mismanagement occurred. Fortunately, he already foresaw this happening and it led to his decision to sell the business.

They didn’t sell the business because it was on a decline. In fact, it was still making a profit. Nothing was wrong with the technicalities of the business. It’s just that Charles’ heart wasn’t there anymore.

If it was still making money, wasn’t it still good passive income? What were some other factors that led to this decision?

Passive income is money that comes in without the need for you to manage it. The problem with retail is that it requires meticulous supply chain management. You have to make sure that things are going smoothly.

Charles tried hiring people to fill in the gap of him not being focused on it anymore. But when he realized that he no longer wanted to continue minding this business, he already chose to sell it instead.

When Charles had already decided to sell fabrics, he had to make sure that he sells the business to someone who has experience. He wanted to sell it to someone who loves the fabrics industry—someone who will spend more to keep it alive. That’s why he gave his business to the highest bidder.

Was it difficult selling your business? How was your experience?

Charles isn’t a person that dwells one the more technical aspects of selling a business, mostly because of his upbringing. He doesn’t need meticulous documentation or an intricate process, all he needs is the trust between two business people.

Excerpt

How Did This Divisoria Boy Open The Only Fabric Store In The Mall of Asia in 2009?

Have you ever heard of the Cotton Depot? Charles Sy, the founder shares his story from the streets of Divisoria to the Mall of Asia in this podcast!

How did growing up in a family full of business people influence you?

Charles’ first job was in a company named Asiatic Development Corporation which is now named Axeia. At the age of 19, he was hired as a purchasing manager and even though he didn’t know much about the industry, he was still trusted to perform at a high level. He stayed there for around 4 years.

While working, he learned that when you have a mentor, you see both the good and the bad things. Charles looks for the good traits that are compatible with his personality and applies them. The bad traits and the ones that don’t fit his personality, he takes note of.

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Would you say that influenced you and how you do business, how you train and how you treat your employees?

Charles grew up in Divisoria. There, the rules, if any, are a bit different. To some extent, they don’t even follow the government’s regulations. They take every opportunity to save more and to sell more.

Charles’ upbringing here had a huge effect on his initial mindset. He thought that being successful in Divisoria meant they were doing the right thing—even if in reality, nobody was benefiting from these.

When he went into corporate, the laws were implemented and upheld. Charles had to learn things from scratch. You can say Charles went from one side of the coin to another.

What did your parents think of your choosing to work in corporate?

It was a family friend that brought Charles into corporate. At the time, his parents were very open-minded. Out of six siblings, two of them were already working for the family business. With that leeway, Charles was able to experience new things. They were fine with him trying out new jobs.

Did you ever feel like you were supposed to be a part of your family business at some point in time?

Charles and his siblings have been training ever since they were kids to help run their business. It’s safe to say that Charles did not look forward to going back to the family business after he graduated. It was not going to be anything new, so Charles didn’t look for it after he finished his studies.

What was your first Business?

After studying in China, Charles’ parents loaned him piles of cloth that they weren’t able to sell for him to start a business. With the products and an investment of his own, he started his own business in Tutuban.

After a while, Charles began to realize something. He thought that the rest of his life could be dedicated to staying in that one store for 8 hours every day or opening up cloth stores in all parts of the Philippines. when he chose the latter, Cotton Depot was born.

Cotton Depot officially started when Charles sent a business proposal to SM. The proposal had no branding, no IPO whatsoever. Along with the proposal was just a commissioned drawing of what the store would look like. After a while, SM called him and approved of his proposal!

The first branch of Cotton Depot was opened at the SM Mall of Asia. As soon as the proposal was approved, they contacted Charles to say that they wanted to set it up the following month. Feeling overwhelmed, Charles had to ask for the aid of his parents for the inventory while he shouldered the expenses for the construction.

With the sudden emergence of Cotton Depot, Charles chose to close down his initial store in Tutuban and focused on Cotton Depot. There, he achieved his ROI in two years.

What led to this fast return of investment was the fact that Cotton Depot was the only fabric store in Mall of Asia during that time. In the whole of Pasay, they were the only ones that catered to the audience.

When you experienced this breakthrough, what did you do next?

Cotton Depot went on smoothly, but that didn’t exempt it from experiencing its fair share of hardships. The store has hard issues with mismanagement. Stores in a mall would usually be open for 12 hours 7 days a week and Charles isn’t always in the store.

Mismanagement happens when the boss isn’t present in the store. Without proper supervision, theft can happen.

Another problem they faced was the aftermath of Typhoon Ondoy. Because of the typhoon, mall-goers would only buy necessities. The demand for cloth went down drastically. For months, the MOA branch of Cotton Depot wasn’t able to recover. This along with other external factors such as the increase in rent led to Charles’ decision to move his store.

Luckily, offers flooded from other malls to get his store—which all came after he went out of MOA.

Excerpt

How do you improve your leadership skills?
Harry wears a lot of hats. He is a husband, a businessman and most importantly, a Christian. Most of the books that Harry reads focus on spirituality and character development.
You can’t always put the blame on the client or your people. In most cases of fall out or disagreement, it starts from within. Harry thinks leadership starts with leading himself through consuming multiple media of self-improvement. Through this, he believes that he becomes more flexible and easier to deal with.
As a fact-based leader, Harry cares a lot about results. Sometimes he only says what’s necessary to get that result and he forgets the manner in which he says it. How he says it depends a lot on his character, rather than the person it’s directed to. The truth will never change, but the way it is said dictates the other person’s reaction.

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Is there anything new that you’re working on today?
He is currently starting up a Korean chicken business with his wife named Yum Yum Chicken. They have had mini-food stalls since 2017 and are currently looking for a commissary.

The only synergy between the two businesses that Harry handles is his sense of leadership. In whatever kind of industry that you enter, it’s not just about the know-how but also about how you lead your team into it.

People won’t suddenly change just because they shifted to another profession. The makeup of your character remains the same.

Would you say that it was easier to start Yum Yum Chicken because you already had that experience in leadership from Reality Box?
The opportunities that came were definitely blessings from God, but he wouldn’t have taken advantage of them if it weren’t because of the experience in leadership that he got from Reality Box.

How can people reach you?
You can find Harry Uy through the website of Reality Box: reality-box.com. for YumYum Chicken, you can easily find them in Facebook @yumyumchickenph. You can order through their Facebook page, Grabfood, and Lalamove.

Excerpt

What is so remarkable about Reality Box that you get most of your clients out of word of mouth?
Reality Box does not have any revision caps. They never ship out a product unless the client is absolutely happy with it. Harry will do everything in his abilities to please his clients.
This is not in the contract that Harry provides to his clients. But it’s something that most of his returning clients have appreciated a lot. This commitment to providing the best possible output for their clients is what fuels their word of mouth marketing.

It’s important to know what your boundaries are. But if you truly care for your clients, you’ll go the extra mile to make them happy. You won’t stop until your product is perfect in the eyes of their clients.

Pitching for a specific sale to couples or personal events can be hard since they would need to see the portfolios particular to their kind of event. However, through word of mouth marketing in the corporate field, you get rid of all that hassle.

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Word of mouth is still the best form of marketing today. As they say, advertising is a tax paid by companies that have unremarkable products and services.

Excerpt

How many clients and hires were you able to get from the beginning to today?
Reality box has a unique point of sales which is the relationship that they build with their clients and the way they tell their clients’ stories. From simple coverage, Reality box evolved into a documentary focused on storytelling.
Before, they started with just one event every so often. And by God’s Grace, they became busier, until they had to expand by hiring freelancers. However, Harry did have to impose his own brand onto these creative freelancers.
They have their own styles that can influence the main product which can lead to inconsistencies. Because of this, most of Harry’s returning clients can identify which products weren’t edited by him. That proves two things: one, there are inconsistencies in the branding of their videos; and two, Harry has already developed his own brand of video editing.

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How do you hire people?
Harry considers his processes easy. What he does is he tries out the freelancers for one shoot. If they don’t like their product or work ethic, then they won’t be called for future events. He really needs to give them a chance because portfolios aren’t exactly an accurate measurement.
Fortunately, Harry already has a group of freelancers that are loyal to his brand. They would come back frequently in order to shoot. The new hires will be incorporated into this team and Harry will be able to check how he works alone and with the team.
When it comes to event coverage, Harry says that seminars are probably one of the hardest ones to cover because sometimes, the videographer will get bored and would frequent the comfort room. They assume that the speaker won’t be moving so much.
Despite this, Harry still continues to provide seminar coverage.
He believes that familiarity breeds contempt. By hiring these freelancers who are not familiar with Harry, they apply a certain level of respect and discipline that gets lost when they become too close to their boss.

Do you have any plans for expansion?
Harry plans to add new services such as animation as well as a way to incorporate retail into their business. Nothing has been set in stone, but it’s something that Harry is doing to see if it will turn out alright.

Excerpt

How are you able to adapt and build your business? What do you do to adapt and get ahead of the curve?

As leaders, Harry goes out and smells the air. He knows where the industry is going to. If you can’t see the direction, you will have a hard time adjusting to the coming trends.

In Harry’s case, more and more of his clients no longer want a storyboard and a video shoot. They want Harry to just work with stock videos and stock photos. All they want are a script, voice-over, and animation! From that, he already knows where the industry is headed.

Before, they would usually have a very hectic work week, shooting documentaries for their clients. Now that their clients don’t want to invest the time, they just need a script and the rest will be done through animations.

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By knowing what the clients don’t want to invest, Harry can adjust accordingly. That’s one of his ways to stay ahead of the curve.

Harry even makes the script for his clients because in most cases, that’s the most important part of initial negotiations. As he mentioned, in order for a client to choose you, you have to present your price and your script. Most corporate clients will already expect you to have a script along with your quotation.

Harry once had a terrible experience with one of his to-be clients. When they presented their quotation along with three different sets of storyboards, the client took one of them and told Harry that they’ll contact them after a few days. They just took that storyboard and used it without paying for it—even if they used the first part of it. They essentially stole Harry’s intellectual property.

How do you prevent that from happening?

This can only happen for new clients because there’s the underlying expectation that you will provide the script. Whether they take it or not is up to them.

Every time it’s a new client, there’s a risk. But every time it’s a repeating client, it’s a service of love. Repeating clients, especially in the corporate industry, can lead to many additional projects. Sometimes each department will get its services. They can’t exactly say that they don’t do a certain thing because that’s like rejecting their clients. In most cases, it’s in how you build relationships with your clients.

With that in mind, Harry mentioned the value of building a relationship with corporate clients.

For example, a client for a wedding would probably bring you two or three referrals after them. However, if it’s a corporation, the clientele will move around and result in more projects.

It’s the relationship that you’ve built with your original contact that matters a lot.

To be clear, you do not have a clear way of making sure that your clients can’t steal your ideas?

The best thing that Harry can do is to make their storyboard as general as possible. The storyboard will get even more detailed only when the deal gets closed. And of course, now, Harry doesn’t let any of his clients take the paper.